EXHIBIT 4.2
EXECUTION COPY
SERIES SUPPLEMENT dated as of December 8, 1997 (this "Supplement"), by and
between PG&E FUNDING LLC, a Delaware limited liability company (the "Note
Issuer"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association (the "Note Trustee"), as Note Trustee under the Indenture dated as
of December 8, 1997, between the Note Issuer and the Note Trustee (the
"Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the Note
Issuer and the Note Trustee may at any time and from time to time enter into one
or more indentures supplemental to the Indenture for the purposes of authorizing
the issuance by the Note Issuer of a Series of Notes and specifying the terms
thereof. The Note Issuer has duly authorized the creation of a Series of Notes
with an initial aggregate principal amount of $2,901,000,000 to be known as the
Note Issuer's Notes, Series 1997-1 (the "Series 1997-1 Notes"), and the Note
Issuer and the Note Trustee are executing and delivering this Supplement in
order to provide for the Series 1997-1 Notes.
All terms used in this Supplement that are defined in the Indenture, either
directly or by reference therein, have the meanings assigned to them therein,
except to the extent such terms are defined or modified in this Supplement or
the context clearly requires otherwise. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture, the terms and provisions of this
Supplement shall govern.
SECTION 1. Designation. The Series 1997-1 Notes shall be designated
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generally as the Note Issuer's Notes, Series 1997-1 and further denominated as
Classes A-1 through A-8.
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SECTION 2. Initial Principal Amount; Note Interest Rate; Scheduled
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Maturity Date; Final Maturity Date. The Notes of each Class of the Series 1997-
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1 shall have the initial principal amount, bear interest at the rates per annum
and shall have Scheduled Maturity Dates and Final Maturity Dates as set forth
below:
Initial
Principal Interest Scheduled Final
Class Amount Rate Maturity Date Maturity Date
----- ------------- -------- ------------- -------------
A-1 $ 125,000,000 5.94% September 25, 1998 September 25, 2000
A-2 $ 265,000,000 6.01% June 25, 1999 June 25, 2001
A-3 $ 280,000,000 6.15% June 25, 2000 June 25, 2002
A-4 $ 300,000,000 6.16% June 25, 2001 June 25, 2003
A-5 $ 290,000,000 6.25% June 25, 2002 June 25, 2004
A-6 $ 375,000,000 6.32% September 25, 2003 September 25, 2005
A-7 $866,0000,000 6.42% September 25, 2006 September 25, 2008
A-8 $ 400,000,000 6.48% December 26, 2007 December 26, 2009
The Note Interest Rate shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 3. Authentication Date; Payment Dates; Expected Amortization
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Schedule for Principal; Quarterly Interest; Required Overcollateralization
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Level; No Premium. (a) Authentication Date. The Series 1997-1 Notes that are
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authenticated and delivered by the Note Trustee to or upon the order of the Note
Issuer on December 8, 1997 (the "Series Issuance Date") shall have as their date
of authentication December 8, 1997.
(b) Payment Dates. The Payment Dates for the Series 1997-1 Notes are the
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March 25, June 25, September 25 and December 26 of each year or, if any such
date is not a Business Day, the next succeeding Business Day, commencing on
March 25, 1998 and continuing until the earlier of repayment of the Series 1997-
1 Notes in full and the Final Maturity Date for the Series 1997-1 Notes.
(c) Expected Amortization Schedule for Principal. Unless an Event of
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Default shall have occurred and be continuing, on each Payment Date, the Note
Trustee shall distribute to the Noteholders of record as of the related
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Record Date amounts payable pursuant to Section 8.02(d)(vii) of the Indenture as
principal, in the following order and priority: (1) to the holders of the Class
A-1 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (2) to the holders of the Class A-2 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero; (3)
to the holders of the Class A-3 Notes, until the Outstanding Amount of such
Class of Notes thereof has been reduced to zero; (4) to the holders of the Class
A-4 Notes, until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; (5) to the holders of the Class A-5 Notes until the Outstanding
Amount of such Class of Notes thereof has been reduced to zero; (6) to the
holders of the Class A-6 Notes, until the Outstanding Amount of such Class of
Notes thereof has been reduced to zero; (7) to the holders of the Class A-7
Notes until the Outstanding Amount of such Class of Notes thereof has been
reduced to zero; and (8) to the holders of the Class A-8 Notes, until the
Outstanding Amount of such Class of Notes thereof has been reduced to zero;
provided, however, that in no event shall a principal payment pursuant to this
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Section 3(c) on any Class on a Payment Date be greater than the amount necessary
to reduce the Outstanding Amount of such Class of Notes below the amount
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Class and Payment Date.
(d) Quarterly Interest. Quarterly Interest will be payable on each Class
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of the Series 1997-1 Notes on each Payment Date in an amount equal to one-fourth
of the product of (i) the applicable Note Interest Rate and (ii) the Outstanding
Amount of the related Class of Notes as of the close of business on the
preceding Payment Date after giving effect to all payments of principal made to
the holders of the related Class of Series 1997-1 Notes on such preceding
Payment Date; provided, however, that with respect to the initial Payment Date
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or, if no payment has yet been made, interest on the outstanding principal
balance will accrue from and including the Series Issuance Date to, but
excluding, the following Payment Date.
(e) Required Overcollateralization Level. The Required
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Overcollateralization Level for any Payment Date shall be as set forth in
Schedule B hereto.
(f) No Premium. No premium will be payable in connection with the early
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redemption of the Series 1997-1 Notes.
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SECTION 4. Minimum Denominations. The Series 1997-1 Notes shall be
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issuable in the Minimum Denomination and integral multiples thereof.
SECTION 5. Certain Defined Terms. Article One of the Indenture provides
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that the meanings of certain defined terms used in the Indenture shall, when
applied to the Notes of a particular Series, be as defined in Article One but
with such additional provisions as are specified in the related Supplement.
Additionally, Article Two of the Indenture provides that with respect to a
particular Series of Notes, certain terms will have the meanings specified in
the related Supplement. With respect to the Series 1997-1 Notes, the following
definitions shall apply:
"Minimum Denomination" shall mean $1,000.
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"Note Interest Rate" has the meaning set forth in Section 2 of this
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Supplement.
"Payment Date" has the meaning set forth in Section 3(b) of this
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Supplement.
"Quarterly Interest" has the meaning set forth in Section 3(d) of this
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Supplement.
"Series Issuance Date" has the meaning set forth in Section 3(a) of this
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Supplement.
SECTION 6. Delivery and Payment for the Series 1997-1 Notes; Form of the
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Series 1997-1 Notes. The Note Trustee shall deliver the Series 1997-1 Notes to
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the Note Issuer when authenticated in accordance with Section 2.03 of the
Indenture. The Series 1997-1 Notes of each Class shall be in the form of
Exhibits A-1 through A-8 hereto.
SECTION 7. Ratification of Agreement. As supplemented by this Supplement,
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the Indenture is in all respects ratified and confirmed and the Indenture, as so
supplemented by this Supplement, shall be read, taken, and construed as one and
the same instrument.
SECTION 8. Counterparts. This Supplement may be executed in any number of
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counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
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SECTION 9. Governing Law. This Supplement shall be construed in
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accordance with the laws of the State of California, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10. Trust Obligation. No recourse may be taken, directly or
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indirectly, with respect to the obligations of the Note Issuer or the Note
Trustee on the Notes or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Note
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Note Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Note Trustee in its individual capacity, any
holder of a beneficial interest in the Note Issuer or the Note Trustee or of any
successor or assign of the Note Trustee in its individual capacity, except as
any such Person may have expressly agreed (it being understood that the Note
Trustee has no such obligations in its individual capacity).
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IN WITNESS WHEREOF, the Note Issuer and the Note Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above written.
PG&E FUNDING LLC, as Note Issuer,
by
____________________________
Name:
Title:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its
individual capacity but solely
as Note Trustee,
by
____________________________
Name:
Title:
SCHEDULE A
Expected Amortization Schedule
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OUTSTANDING PRINCIPAL BALANCE
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PAYMENT DATE CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5
------------ ------------ ------------ ------------ ------------ ------------
Series Issuance Date. $125,000,000 $265,000,000 $280,000,000 $300,000,000 $290,000,000
Mar. 1998....... 106,301,458 265,000,000 280,000,000 300,000,000 290,000,000
June 1998....... 24,180,963 265,000,000 280,000,000 300,000,000 290,000,000
Sept. 1998...... 0 197,119,806 280,000,000 300,000,000 290,000,000
Dec. 1998....... 0 99,900,000 280,000,000 300,000,000 290,000,000
Mar. 1999....... 0 14,470,651 280,000,000 300,000,000 290,000,000
June 1999....... 0 0 232,189,255 300,000,000 290,000,000
Sept. 1999...... 0 0 163,057,145 300,000,000 290,000,000
Dec. 1999....... 0 0 89,800,000 300,000,000 290,000,000
Mar. 2000....... 0 0 16,411,349 300,000,000 290,000,000
June 2000....... 0 0 0 250,558,413 290,000,000
Sept. 2000...... 0 0 0 177,245,891 290,000,000
Dec. 2000....... 0 0 0 99,700,000 290,000,000
Mar. 2001....... 0 0 0 24,432,693 290,000,000
June 2001....... 0 0 0 0 248,916,995
Sept. 2001...... 0 0 0 0 176,300,487
Dec. 2001....... 0 0 0 0 99,600,000
Mar. 2002....... 0 0 0 0 24,770,146
June 2002....... 0 0 0 0 0
Sept. 2002...... 0 0 0 0 0
Dec. 2002....... 0 0 0 0 0
Mar. 2003....... 0 0 0 0 0
June 2003....... 0 0 0 0 0
Sept. 2003...... 0 0 0 0 0
Dec. 2003....... 0 0 0 0 0
Mar. 2004....... 0 0 0 0 0
June 2004....... 0 0 0 0 0
Sept. 2004...... 0 0 0 0 0
Dec. 2004....... 0 0 0 0 0
Mar. 2005....... 0 0 0 0 0
June 2005....... 0 0 0 0 0
Sept. 2005...... 0 0 0 0 0
Dec. 2005....... 0 0 0 0 0
Mar. 2006....... 0 0 0 0 0
June 2006....... 0 0 0 0 0
Sept. 2006...... 0 0 0 0 0
Dec. 2006....... 0 0 0 0 0
Mar. 2007....... 0 0 0 0 0
June 2007....... 0 0 0 0 0
Sept. 2007...... 0 0 0 0 0
Dec. 2007....... 0 0 0 0 0
OUTSTANDING PRINCIPAL BALANCE
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SERIES
PAYMENT DATE CLASS A-6 CLASS A-7 CLASS A-8 1997-1
------------ ------------ ------------ ------------ --------------
Series Issuance Date. $375,000,000 $866,000,000 $400,000,000 $2,901,000,000
Mar. 1998....... 375,000,000 866,000,000 400,000,000 2,882,301,458
June 1998....... 375,000,000 866,000,000 400,000,000 2,800,180,963
Sept. 1998...... 375,000,000 866,000,000 400,000,000 2,708,119,806
Dec. 1998....... 375,000,000 866,000,000 400,000,000 2,610,900,000
Mar. 1999....... 375,000,000 866,000,000 400,000,000 2,525,470,651
June 1999....... 375,000,000 866,000,000 400,000,000 2,463,189,255
Sept. 1999...... 375,000,000 866,000,000 400,000,000 2,394,057,145
Dec. 1999....... 375,000,000 866,000,000 400,000,000 2,320,800,000
Mar. 2000....... 375,000,000 866,000,000 400,000,000 2,247,411,349
June 2000....... 375,000,000 866,000,000 400,000,000 2,181,558,413
Sept. 2000...... 375,000,000 866,000,000 400,000,000 2,108,245,891
Dec. 2000....... 375,000,000 866,000,000 400,000,000 2,030,700,000
Mar. 2001....... 375,000,000 866,000,000 400,000,000 1,955,432,693
June 2001....... 375,000,000 866,000,000 400,000,000 1,889,916,995
Sept. 2001...... 375,000,000 866,000,000 400,000,000 1,817,300,487
Dec. 2001....... 375,000,000 866,000,000 400,000,000 1,740,600,000
Mar. 2002....... 375,000,000 866,000,000 400,000,000 1,665,770,146
June 2002....... 333,909,318 866,000,000 400,000,000 1,599,909,318
Sept. 2002...... 261,190,055 866,000,000 400,000,000 1,527,190,055
Dec. 2002....... 184,500,000 866,000,000 400,000,000 1,450,500,000
Mar. 2003....... 109,704,693 866,000,000 400,000,000 1,375,704,693
June 2003....... 43,605,239 866,000,000 400,000,000 1,309,605,239
Sept. 2003...... 0 836,923,567 400,000,000 1,236,923,567
Dec. 2003....... 0 760,400,000 400,000,000 1,160,400,000
Mar. 2004....... 0 685,717,128 400,000,000 1,085,717,128
June 2004....... 0 619,362,446 400,000,000 1,019,362,446
Sept. 2004...... 0 546,689,411 400,000,000 946,689,411
Dec. 2004....... 0 470,300,000 400,000,000 870,300,000
Mar. 2005....... 0 395,711,287 400,000,000 795,711,287
June 2005....... 0 329,092,847 400,000,000 729,092,847
Sept. 2005...... 0 256,436,544 400,000,000 656,436,544
Dec. 2005....... 0 180,200,000 400,000,000 580,200,000
Mar. 2006....... 0 105,715,908 400,000,000 505,715,908
June 2006....... 0 38,832,155 400,000,000 438,832,155
Sept. 2006...... 0 0 366,190,629 366,190,629
Dec. 2006....... 0 0 290,100,000 290,100,000
Mar. 2007....... 0 0 215,130,076 215,130,076
June 2007....... 0 0 146,755,743 146,755,743
Sept. 2007...... 0 0 72,786,689 72,786,689
Dec. 2007....... 0 0 0 0
SCHEDULE B
Required Overcollateralization Level Schedule
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PAYMENT REQUIRED
DATE OVERCOLLATERALIZATION LEVEL
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Mar. 1998 $ 362,625.00
June 1998 $ 725,250.00
Sept. 1998 $ 1,087,875.00
Dec. 1998 $ 1,450,500.00
Mar. 1999 $ 1,813,125.00
June 1999 $ 2,175,750.00
Sept. 1999 $ 2,538,375.00
Dec. 1999 $ 2,901,000.00
Mar. 2000 $ 3,263,625.00
June 2000 $ 3,626,250.00
Sept. 2000 $ 3,988,875.00
Dec. 2000 $ 4,351,500.00
Mar. 2001 $ 4,714,125.00
June 2001 $ 5,076,750.00
Sept. 2001 $ 5,439,375.00
Dec. 2001 $ 5,802,000.00
Mar. 2002 $ 6,164,625.00
June 2002 $ 6,527,250.00
Sept. 2002 $ 6,889,875.00
Dec. 2002 $ 7,252,500.00
Mar. 2003 $ 7,615,125.00
June 2003 $ 7,977,750.00
Sept. 2003 $ 8,340,375.00
Dec. 2003 $ 8,703,000.00
Mar. 2004 $ 9,065,625.00
June 2004 $ 9,428,250.00
Sept. 2004 $ 9,790,875.00
Dec. 2004 $10,153,500.00
Mar. 2005 $10,516,125.00
June 2005 $10,878,750.00
Sept. 2005 $11,241,375.00
Dec. 2005 $11,604,000.00
Mar. 2006 $11,966,625.00
June 2006 $12,329,250.00
Sept. 2006 $12,691,875.00
Dec. 2006 $13,054,500.00
Mar. 2007 $13,417,125.00
June 2007 $13,779,750.00
Sept. 2007 $14,142,375.00
Dec. 2007 $14,505,000.00
EXHIBIT A
Form of Note
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[To be provided]
EXHIBIT A
F o r m o f N o t e
- - - - - - - - - -
REGISTERED $____________
No. ______
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
THE PRINCIPAL OF THIS CLASS A - [ ] NOTE WILL BE PAID IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS
CLASS A - [ ] NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.
[NAME OF SPE]
NOTES, SERIES 199[ ] - [ ], Class A - [ ].
INTEREST ORIGINAL PRINCIPAL FINAL MATURITY
RATE AMOUNT DATE
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[Name of SPE], a limited liability company organized and existing
under the laws of the State of Delaware (herein referred to as the "Note
Issuer"), for value received, hereby promises to pay to [ ], or
registered assigns, the Original Principal Amount shown above in quarterly
installments on the Payment Dates and in the amounts specified on the reverse
hereof or, if less, the amounts determined pursuant to Section 8.02 of the
Indenture, in each year, commencing on the date determined as provided on the
reverse hereof and ending on or before the Final Maturity Date shown above and
to pay interest, at the Interest Rate shown above, on each March 25, June 25,
September 25 and December 26 or if any such day is not a Business Day, the next
succeeding Business Day, commencing on [ ] and continuing until the earlier
of the payment of the principal hereof and the Final Maturity Date (each a
"Payment Date"), on the principal amount of this Class A -[ ] Note. Interest
on this Class A - [ ] Note will accrue for each Payment Date from the most
recent Payment Date on which interest has been paid to but excluding such
Payment
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Date or, if no interest has yet been paid, from [ ]. Interest will be computed
on the basis of a [specify method of computation]. Such principal of and
interest on this Class A - [ ] Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Class A -[ ] Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Note Issuer with respect to this Class A - [ ] Note shall be applied first
to interest due and payable on this Class A - [ ] Note as provided above and
then to the unpaid principal of and premium, if any, on this Class A - [ ] Note,
all in the manner set forth in Section 8.02 of the Indenture.
Reference is made to the further provisions of this Class A - [ ] Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A - [ ] Note.
Unless the certificate of authentication hereon has been executed by
the Note Trustee whose name appears below by manual signature, this Class A - [
] Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Note Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date:
[NAME OF SPE],
by _______________________
Name:
Title:
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NOTE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: _________, 199_
This is one of the Class A - [ ] Notes of the Series 199[_]-[_] Notes,
designated above and referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
not in its individual capacity but
solely as Note Trustee,
by __________________________
Authorized Signatory
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[REVERSE OF NOTE]/1/
This Series 199[ ] - [ ], Class A - [ ] Note is one of a duly
authorized issue of Notes of the Note Issuer, designated as its Notes (herein
called the "Notes"), issued and to be issued in one or more Series, which Series
are issuable in one or more Classes, and this Series 199[ ] - [ ] Note, in
which this Class A - [ ] Note represents an interest, consists of [ ]
Classes, including this Class A - [ ] Note (herein called the "Class A - [ ]
Notes"), all issued and to be issued under an Indenture dated as of [ ],
1997, and a Series Supplement thereto (such Indenture and Series Supplement,
each as supplemented or amended, are herein referred to collectively as the
"Indenture"), each between the Note Issuer and Bankers Trust Company of
California, N.A., as Note Trustee (the "Note Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Note Issuer, the Note Trustee and the
Holders of the Notes. All terms used in this Class A - [ ] Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in the Indenture.
The Class A - [ ] Notes, the other Classes of Series 199[ ]-[ ]
Notes and any other Series of Notes issued by the Note Issuer are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
The principal of this Class A - [ ] Note shall be payable on each
Payment Date only to the extent that amounts in the Collection Account are
available therefor, and only until the outstanding principal balance thereof on
such Payment Date (after giving effect to all payments of principal, if any,
made on such Payment Date)
_______________
/1/The form of the reverse of a Note is substantially as follows, unless
otherwise specified in the related Series Supplement.
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has been reduced to the principal balance specified in the Expected Amortization
Schedule which is attached to the related Series Supplement as Schedule A,
unless payable earlier either because (x) an Event of Default shall have
occurred and be continuing and the Note Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes of
all Series have declared the Notes of all Series to be immediately due and
payable in accordance with Section 5.02 of the Indenture, (y) the Note Issuer,
at its option, shall have called for the redemption of the Series 199[ ] - [ ]
Notes pursuant to Section 10.01 of the Indenture or (z) the Note Issuer shall
have called for the redemption of the Series 199[ ] - [ ] Notes pursuant to
Section 10.04 of the Indenture if the Seller is required to repurchase the
Transition Property pursuant to Section 5.01(b) of the Sale Agreement. However,
actual principal payments may be made in lesser than expected amounts and at
later than expected times as determined pursuant to Section 8.02 of the
Indenture. The entire unpaid principal amount of this Class A - [ ] Note shall
be due and payable on the earlier of the Final Maturity Date hereof, the
Optional Redemption Date, if any, and the Mandatory Redemption Date, if any,
herefor. Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable, if not then previously paid, on the date on
which an Event of Default shall have occurred and be continuing and the Note
Trustee or the Holders of the Notes representing not less than a majority of the
Outstanding Amount of the Notes of all Series have declared the Notes of all
Series to be immediately due and payable in the manner provided in Section 5.02
of the Indenture. All principal payments on the Class A - [ ] Notes shall be
made pro rata to the Class A - [ ] Noteholders entitled thereto based on the
respective principal amounts of the Class A - [ ] Notes held by them.
Payments of interest on this Class A - [ ] Note due and payable on
each Payment Date, together with the installment of principal or premium, if
any, shall be made by check mailed first-class, postage prepaid, to the Person
whose name appears as the Registered Holder of this Class A - [ ] Note (or one
or more Predecessor Notes) on the Note Register as of the close of business on
the Record Date or in such other manner as may be provided in the related Series
Supplement, except that with respect to Notes registered on the Record Date in
the name of the Certificate Trustee, payments will be made by wire transfer in
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immediately available funds to the account designated by the Certificate Trustee
and except for the final installment of principal and premium, if any, payable
with respect to this Class A - [ ] Note on a Payment Date which shall be payable
as provided below. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Class A - [ ] Note be
submitted for notation of payment. Any reduction in the principal amount of this
Class A - [ ] Note (or any one or more Predecessor Notes) effected by any
payments made on any Payment Date shall be binding upon all future Holders of
this Class A - [ ] Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Class A - [ ] Note on
a Payment Date, then the Note Trustee, in the name of and on behalf of the Note
Issuer, will notify the Person who was the Registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed no later than five days
prior to such final Payment Date and shall specify that such final installment
will be payable only upon presentation and surrender of this Class A - [ ] Note
and shall specify the place where this Class A - [ ] Note may be presented and
surrendered for payment of such installment.
The Note Issuer shall pay interest on overdue installments of interest
at the Note Interest Rate to the extent lawful.
As provided in the Indenture, the Class A - [ ] Notes may be redeemed,
in whole but not in part, at the option of the Note Issuer on any Payment Date
at the Optional Redemption Price if, after giving effect to payments that would
otherwise be made on such Payment Date, the Outstanding Amount of the Class A -
[ ] Notes has been reduced to less than five percent of the initial principal
balance thereof. In addition, as provided in the Indenture, if the Seller is
required to repurchase the Transition Property pursuant to Section 5.01(b) of
the Sale Agreement, the Note Issuer will be required to redeem all outstanding
Series of Notes, including the Class A - [ ] Notes, on or before the fifth
Business Day following the Repurchase Date (as defined in the Sale Agreement).
8
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A - [ ] Note may be registered on the
Note Register upon surrender of this Class A - [ ] Note for registration of
transfer at the office or agency designated by the Note Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by (a) a written instrument of
transfer in form satisfactory to the Note Trustee duly executed by the Holder
hereof or his attorney duly authorized in writing, with such signature
guaranteed by an institution which is a member of one of the following
recognized Signature Guaranty Programs: (i) The Securities Transfer Agent
Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program
(MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other
guarantee program acceptable to the Note Trustee, and (b) such other documents
as the Note Trustee may require, and thereupon one or more new Class A - [ ]
Notes of Minimum Denominations and in the same aggregate principal amount will
be issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Class A - [ ] Note,
but the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange, other than exchanges pursuant to Section
2.04 or 9.06 of the Indenture not involving any transfer.
Each Noteholder, by acceptance of a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Note Issuer or the Note Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Note Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Note Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director or employee of the Note Trustee in its individual capacity,
any holder of a beneficial interest in the Note Issuer or the Note Trustee or of
any successor or assign of the Note Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the Note
Trustee has no such obligations in its individual capacity).
Prior to the due presentment for registration of transfer of this
Class A - [ ] Note, the Note Issuer, the Note Trustee and any agent of the Note
Issuer or the Note Trustee may treat the Person in whose name this Class A -
9
[ ] Note is registered (as of the day of determination) as the owner hereof for
the purpose of receiving payments of principal of and premium, if any, and
interest on this Class A - [ ] Note and for all other purposes whatsoever,
whether or not this Class A - [ ] Note be overdue, and neither the Note Issuer,
the Note Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Note Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Note Issuer with the consent of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding of each Series or Class to be affected. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Notes of all Series, on behalf of the Holders of
all the Notes, to waive compliance by the Note Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Class A - [ ]
Note (or any one of more Predecessor Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Class A - [ ] Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class A - [ ] Note. The Indenture also permits the Note Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Note Issuer" as used in this Class A -[ ] Note includes any
successor to the Note Issuer under the Indenture.
The Note Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Note
Trustee and the Holders of Notes under the Indenture.
The Class A - [ ] Notes are issuable only in registered form in
denominations as provided in the Indenture and the related Series Supplement,
subject to certain limitations therein set forth.
10
This Class A - [ ] Note, the Indenture and the related Series
Supplement shall be construed in accordance with the laws of the State of
California, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Class A
- [ ] Note or of the Indenture shall alter or impair the obligation of the Note
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Class A - [ ] Note at the times, place, and rate, and in the
coin or currency herein prescribed.
The Holder of this Class A - [ ] Note by the acceptance hereof agrees
that, notwithstanding any provision of the Indenture or the related Series
Supplement to the contrary, the Holder shall have no recourse against the Note
Issuer, but shall look only to the Collateral, with respect to any amounts due
to the Holder under this Class A - [ ] Note.
11
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Class A - [ ] Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________________, attorney, to transfer said
Class A - [ ] Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated: _______________ ___________________________*
Signature Guaranteed:
____________________________
_______________________
*NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Class A - [ ] Note
in every particular, without alteration, enlargement or any change whatsoever.